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Wednesday, May 15, 2019, 21:18

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HK stocks rally on fresh trade deal optimism

By Edith Lu

Wednesday, May 15, 2019, 21:18By Edith Lu

HONG KONG-Investors breathed a sigh of relief on Wednesday as the Hong Kong stock market staged a rebound with modest gains on optimism that a deal could ultimately be struck in the protracted Sino-US trade talks.

The blue-chip Hang Seng Index chalked up 146.69 points, or 0.52 percent, to close at 28,268.71 after having opened 49.3 points higher. The benchmark rose rapidly in afternoon trading, hitting an intraday high of 28,441.49. Market turnover reached HK$96.11 billion.

The surge followed remarks by US President Donald Trump on Tuesday as he softened his tone, expressing optimism about reaching an agreement with China to resolve their trade spat.

“We’re having a little squabble with China,” Trump told reporters. “We still have a very good dialogue.”

Investors took heart from the comments, which were taken to mean that a deal could eventually be clinched.

All three major US indexes climbed on Tuesday night, with the Dow Jones Industrial Average closing 207.06 points, or 0.82 percent, higher, the S&P 500 rising 22.54 points, or 0.8 percent, and the Nasdaq advancing 87.41 points, or 1.14 percent.

Stock markets on the Chinese mainland also reversed a two-day losing streak on Wednesday as the benchmark Shanghai Composite Index ended up 1.91 percent at 3,077.73.

Hong Kong’s equity market, which was shut on Monday for a holiday, has been relatively resilient to the tense trade relations between China and the US.

“This dynamic suggests that downside volatility will persist until an actual trade agreement is signed. In the event of a resolution to the trade dispute, arkets may stage a rally, but I believe the scale of such a trade-linked rally would be modest, as a resolution would allow investors to focus on other factors that drive returns,” said Hannah Anderson, global market strategist at JP Morgan Asset Management in Hong Kong.

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